Asia Market Quick Take – 27 February, 2026

Key points:

• Macro: Tokyo Core CPI rises 1.8% but still below target of 2%
• Equities: Nvidia drops 5.5%, questioning AI spending; Netflix surges 11%, abandons bid
• FX: USD gains on strong jobless data; GBP pressured by risk sentiment
• Commodities: Gold is on course for a seventh straight monthly gain
• Fixed income: 10-year yield down 4bp to 4.01%, lowest since November

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Disclaimer: Past performance does not indicate future performance.

Macro:

• U.S. jobless claims increased by 4,000 to 212,000 in mid-February, below expectations and recent averages. Continuing claims fell by 31,000 to 1,833,000, showing labor market stability amid slowing hiring. Federal employee claims, watched due to shutdown impacts, dropped by 141 to 554.
• Canadian wages increased by 1.94% in December 2025 compared to the same month in the previous year. From 1992 to 2025, wage growth in Canada averaged 2.57%, with a peak of 10.10% in May 2020 and a low of -0.40% in May 2001.
• Eurozone's Economic Sentiment Indicator fell to 98.3 from January's 99.3, below the forecast of 99.8. Sentiment declined in services, manufacturing, and construction, but improved for consumers and retailers. The ESI dropped significantly in France and Italy, remaining stable in Spain, Germany, and the Netherlands. Inflation expectations rose, indicating ongoing pricing pressures.
• UK voters took part in a crucial by-election in Gorton and Denton after ex-Labour minister Andrew Gwynne's resignation. A Labour defeat might fuel doubts about PM Starmer's leadership and raise concerns about political instability affecting fiscal policy and the UK's debt outlook.
• Core prices in Tokyo rose by 1.8% year-on-year, marking the lowest rate since October 2024 and remaining below the BOJ's 2% target. In February 2026, pro-reflation academics joined the BOJ board, indicating cautiousness in rate hikes, though board member Hajime Takata supported additional increases. Governor Kazuo Ueda plans to assess economic data in March and April before making rate decisions.
• Iranian state media declared Tehran will not let enriched uranium leave the country, heightening tensions in US-Iran nuclear talks in Geneva ahead of President Trump's deal deadline, raising fears of supply disruptions from the OPEC producer.
• The Trump-Xi summit preparations are faltering, with planning gaps troubling Beijing, reports SCMP. Analysts say preparations are insufficient, bilateral contacts weak, and expected outcomes reduced with less than six weeks to the potential summit.

Equities: 

• US - The S&P 500 fell 0.5% and the Nasdaq dropped 1.1%, overshadowed by a sharp decline in semiconductor shares following Nvidia's results. Despite exceeding earnings and revenue estimates, Nvidia fell 5.5%, raising questions about sustained AI spending. Semiconductor firms Applied Materials and Lam Research fell 4.9% and 4.1%, respectively. In contrast, the financial sector limited overall losses, with JPMorgan up 0.9% and American Express gaining 2.5%. Salesforce rose 3.9% after exceeding profit forecasts, although concerns over AI disruptions were noted. Cybersecurity firm Zscaler plummeted 10% due to weak quarterly metrics. Netflix surged 11%, abandoning a costly bidding war over Warner Bros. Discovery. Block jumped 25% after hours as the Jack Dorsey‑led fintech said it would cut its workforce by nearly half in a bet on AI and raised its full‑year gross profit outlook, already above the average analyst estimate.
• EU - FTSE 100 increased 0.4% to a record above 10,851, driven by strong corporate performances. Rolls-Royce rose nearly 5% following a forecast boost and buyback program. WPP gained 5.4% amid confidence in the new CEO's turnaround plan. London Stock Exchange Group surged 9% after announcing £3 billion in shareholder returns. Meanwhile, miners saw declines: Fresnillo down 5%, Antofagasta 4%, Anglo American over 3%, and Rio Tinto more than 2%.
• HK - Hang Seng fell 1.4% to 26,381 on Thursday, influenced by disappointing Nvidia earnings and U.S.-Iran tensions. Mainland stocks stayed subdued ahead of China's legislative meeting, with losses limited by Lunar holiday spending and eased housing rules in Shanghai. Tech and consumer stocks each dropped over 2%, while financials and property saw moderate declines. Galaxy Entertainment fell 3.9%, while HKEX gained 0.5% on robust Q4 results. Baidu ADR dropped 5.7% amid concerns over decreased advertising revenue and increased AI investments.

FX:

• USD gained slightly after US jobless claims data came in better than expected, with layoffs remaining low. Dollar index hit highs of 97.96. Initial claims rose by 4,000 to 212,000 for the week ending February 21. Andrew Hazlett from Monex Inc. highlighted the importance of focusing on inflation, suggesting a possible interest rate cut later in the year.
• JPY appreciated against the dollar as Bank of Japan's board member Hajime Takata reiterated his call for an interest rate hike. USDJPY dropped 0.2% to 156.13 following recent gains.
• GBP were under pressure due to declining risk sentiment and the collapse of UK lender MFS amid fraud allegations. GBPUSD fell to 1.3345 before bouncing back to 1.3488 as geopolitical tensions eased. Focus shifts to the Gorton and Denton by-election results for insights on voter sentiment toward Labour and Reform.
• AUDUSD falling 0.2% to 0.7109 and USDCAD rising 0.1% to 1.3684 amid strong foreign investment in Canada. EURUSD declined 0.1% to 1.1800.

Commodities:

• Gold steadied near $5,185 an ounce in early trading, on track for a weekly gain after a 0.4% rise, as the US and Iran agreed to extend nuclear talks that kept markets on edge over Middle East risks, with negotiations to continue next week after what mediator Oman called “significant progress,” even as a person familiar with the US stance said officials left disappointed.
• Oil steadied as the US and Iran agreed to resume nuclear talks next week, with a large US force deployment keeping markets on edge, WTI near $65 after a flat close and Brent below $71, amid mixed signals from Geneva—Tehran citing good progress and US officials reportedly disappointed—before a planned meeting in Vienna.

Fixed income:

• Treasuries rallied, with yields across maturities down at least three basis points—led by the seven-year sector—and the 10-year falling as much as four to 4.01%, the lowest since November, as a tech-led sell-off (driven by Nvidia’s results), gilt outperformance, a brief oil dip and expected month-end rebalancing boosted demand; attention now turns to Japan’s two-year auction for a read on appetite amid Bank of Japan signals.

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